I have been paying off a lawsuit from my college which is collecting the unpaid balance on my school account. I have been paying $300 per month in 2017. Am I supposed to file something for taxes? Will I get a return back?
Based on the information provided, it appears that you had an unpaid balance on your student account at your college, and have been paying $300 monthly to satisfy the unpaid balance. If I follow your question, you would have received an annual tuition statement Form 1098-T from the college each year you were in college that could be used to report qualified education expenses and potentially receive a credit on your individual tax return. If you were a dependent on your parent’s tax return during the time you were in college, they may have taken the credit.
The repayment of the unpaid balance would not be a current deduction or postsecondary education expense on your 2017 individual income tax return. It would not be otherwise reportable anywhere on your 2017 individual return.
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Answered by: Christopher C. Humes, CPA, is with Baker Tilly Virchow Krause LLP in Wormleysburg, Pa.